Eagle Point Credit Company · NYSE:ECC
Eagle Point Credit — Q4 2021 Earnings Presentation
38 slides from Eagle Point Credit's earnings presentation, Feb 17, 2022
Slide 1: Eagle Point Credit Company Quarterly Update – 4Q 2021
EAGLE POINT CREDIT COMPANY QUARTERLY UPDATE – 4Q 2021 FEBRUARY 17, 2022
Slide 2: Important Information
I M P O R TA N T I N F O R M AT I O N This report and the information and views included herein do not constitute investment advice, or a recommendation or an offer to enter into any transaction with Eagle Point Credit Company Inc. (the “Company”) or any of its affiliates. This report is provided fo
Slide 3: Table of Contents
TA B L E O F C O N T E N T S 1. Introduction to Eagle Point Credit Company (ECC) 2. Senior Investment Team and Investment Process 3. CLO Equity Overview 4. ECC Supplemental Information 5. Selected Market Data 2
Slide 4: Introduction to Eagle Point Credit Company
INTRODUCTION TO EAGLE POINT CREDIT COMPANY
Slide 5: Company and Adviser Overview
I N T R O D U C T I O N TO E C C Company and Adviser Overview The Company: Eagle Point Credit Company Inc. (ECC) IPO Date October 7, 2014 Primary Investment To generate high current income by investing primarily in equity and junior debt tranches Objective of collateralized loan obligations, or
Slide 6: ECC Highlights
I N T R O D U C T I O N TO E C C ECC Highlights CLO Equity is an The Credit Suisse Leveraged Loan Index has generated positive total returns in 28 of the Attractive Asset Class past 30 years1 Eagle Point believes CLO equity provides an attractive way to obtain exposure to senior secured loans Sp
Slide 7: Cumulative Common Stock Distributions
I N T R O D U C T I O N TO E C C Cumulative Common Stock Distributions ECC pays a monthly distribution of $0.14 per share of common stock1 ECC Cumulative Common Distributions Per Share2 $18.00 $15.76 $16.00 $14.12 $12.80 $14.00 $12.00 $10.40 $10.00 $8.00 $8.00 $6.00 $4.75 $4.00 $2.35 $2.00 $0.00 201
Slide 8: Track Record: Common Stock Total Return and Price to Book Ratio
I N T R O D U C T I O N TO E C C Track Record: Common Stock Total Return and Price to Book Ratio For the period of October 7, 2014 – January 31, 2022: ECC generated a total return1 of 90.12% versus 76.17% for the S&P BDC Index2 (annualized net total return of 9.18% for ECC versus 8.05% for the S&P
Slide 9: ECC By The Numbers
I N T R O D U C T I O N TO E C C ECC By The Numbers Number of 12.2% 123 Current Resets Refis Re-Pricings Monthly Distribution1 $0.14 Distribution Rate1 Calls2 Exposure to Average Years of CLO 18 Experience of Senior Investment Team 97.4% Floating Rate Senior Secured Loans3 Number of Underlying Numbe
Slide 10: Securities Outstanding
I N T R O D U C T I O N TO E C C Securities Outstanding Adviser and Senior Investment Team have $22.4 million invested in ECC, ECCB, ECCY and ECCX1 Common Stock Preferred Stock and Unsecured Notes NYSE Ticker ECC NYSE Ticker ECCB ECCC ECC PRD ECCY ECCX ECCW Series B Series C Series D Term Preferred
Slide 11: Senior Investment Team and Investment Process
SENIOR INVESTMENT TEAM AND INVESTMENT PROCESS
Slide 12: Senior Investment Team
INVESTMENT PROCESS Senior Investment Team Thomas Majewski Daniel Ko Daniel Spinner, Managing Partner Principal and Portfolio CAIA Member of Eagle Point’s Manager Principal and Portfolio Board and Investment Manager Committee 26 20 16 16 25 19 Years in Years in Years in Years in Years in Years in Fin
Slide 13: Private Equity Approach to Fixed Income Investing
INVESTMENT PROCESS Private Equity Approach to Fixed Income Investing Eagle Point employs a process that we believe is more akin to a private equity-style investment approach than the typical process used by many investors in fixed income securities Proactive sourcing of investment opportunities
Slide 14: CLO Equity Overview
© EAGLI CREDIT H POINT COMPANY
Slide 15: Why Invest in CLO Equity?
C L O E Q U I T Y O V E RV I E W Why Invest in CLO Equity? We believe that CLO equity provides an attractive way to obtain exposure to loans Distribution of CLO Equity IRRs CLO Equity Attributes U.S. CLOs (2002 – 2011 Vintages)1 CLO equity has historically generated strong absolute Potential for
Slide 16: The CLO Market is Large and Important to the Loan Market
C L O E Q U I T Y O V E RV I E W The CLO Market is Large and Important to the Loan Market The CLO market is the largest source of capital for the U.S. senior secured loan market U.S. Leveraged Loans Outstanding1 U.S. CLOs Outstanding2 CLOs Oustanding ($B) CLO Count (#) $883 $1,500 $900 2,200 $1,351
Slide 17: Positive Loan Market Track Record
C L O E Q U I T Y O V E RV I E W Positive Loan Market Track Record From 1992 through 2021, the CSLLI generated positive total returns in 28 of the 30 calendar years Credit Suisse Leveraged Loan Index (“CSLLI”) Annual Total Return1 44.9% Annualized Return: 5.5%1 11.2% 11.0% 10.3% 10.0% 9.9% 9.4% 8.9%
Slide 18: Senior Secured Loans are the Raw Materials of CLOs
C L O E Q U I T Y O V E RV I E W Senior Secured Loans are the Raw Materials of CLOs Senior Senior position in a company’s capital structure Secured First lien security interest in a company’s assets Floating Rate Mitigates interest rate risk associated with fixed rate bonds1 Low LTV Senior secured l
Slide 19: The Spread in Loan Market Remains at High End of Historical Range
C L O E Q U I T Y O V E RV I E W The Spread in Loan Market Remains at High End of Historical Range 450 bps Ten Year Average: Spread Long Term Average Ten Year Average 374 bps 409 400 bps Long Term Average: 391 308 bps 386 386 387 376 357 359 358 361 352 348 350 bps 317 303 307 300 bps 284 287 286 27
Slide 20: Loan Market Repayment Rate
C L O E Q U I T Y O V E RV I E W Loan Market Repayment Rate Loan repayments provide capital for reinvestment within CLOs Annual Repayment Rate Annual Repayment Rate Average Average: 60% 56.4% 32.7% 48.9% 48.2% 46.9% 44.7% 40.1% 40% 38.7% 38.1% 37.3% 29.6% 30.0% 26.9% 27.6% 23.6% Cumulative 24.1% Rep
Slide 21: CLOs are Securitizations of a Portfolio of Senior Secured Loans
C L O E Q U I T Y O V E RV I E W CLOs are Securitizations of a Portfolio of Senior Secured Loans ECC invests primarily in the equity and subordinated debt tranches Assets Liabilities + Equity Key CLO Structural Features Senior Debt Typically AAA rated 1. Actively managed portfolio Primarily Floating
Slide 22: ECC Supplemental Information
ECC SUPPLEMENTAL INFORMATION
Slide 23: Income Statement and Balance Sheet Highlights
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Income Statement and Balance Sheet Highlights Q3 2021 Q2 2021 Q1 2021 Q4 2021 (Unaudited) (Unaudited) (Unaudited) Q4 2020 U.S. GAAP Net Investment Income ("NII") before Non-Recurring Expenses2 $0.43 $0.37 $0.32 $0.29 $0.24 U.S. GAAP Realized Gain/(
Slide 24: Distribution and Expense Coverage
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Distribution and Expense Coverage ECC Portfolio Recurring Cash Flows2 $1.32 $1.23 CASH DISTRIBUTIONS RECEIVED3 $1.09 $1.00 $0.59 RECURRING PORTFOLIO $0.87 $0.61 $0.54 $0.48 $0.41 $0.37 $0.32 $0.28 $0.31 $0.22 $0.30 $0.36 $0.24 $0.24 $0.24 Q4 2020 Q
Slide 25: Quarterly Snapshot Trend
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Quarterly Snapshot Trend Q3 2021 Q2 2021 Q1 2021 Q4 2021 (Unaudited) (Unaudited) (Unaudited) Q4 2020 (Figures below are in millions, except for per share amounts and shares outstanding) Distributions Received From CLO Equity2,3 $45.69 $41.98 $37.55
Slide 26: Portfolio Details – Q4 2021
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Portfolio Details – Q4 2021 Years Years Income Cash Income Weighted Weighted Return of Q4 Cash Senior CLO Equity Holdings Remaining in Remaining in Accrued Received Accrued CCC+/Caa1 Junior OC Average Average Diversity Vintage Refi/Reset/Call Capit
Slide 27: Portfolio Details – Q4 2021 (Cont.)
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Portfolio Details – Q4 2021 (Cont.) Years Years Income Cash Income Weighted Weighted Return of Q4 Cash Senior CLO Equity Holdings Remaining in Remaining in Accrued Received Accrued CCC+/Caa1 Junior OC Average Average Diversity Vintage Refi/Reset/Ca
Slide 28: Portfolio Details – Holdings as of January 2022
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Portfolio Details – Holdings as of January 2022 CLO Equity Holdings Cash Received Cash Received CLO Equity Holdings Cash Received Cash Received QoQ Change Junior OC Cushion QoQ Change Junior OC Cushion (as of January 31, 2022) During Q1 2022 During
Slide 29: Changes in Effective Yield
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Changes in Effective Yield The following table represents changes made to effective yields from the prior quarter end CLO Equity Holdings Effective Yield Effective Yield Change in CLO Equity Holdings Effective Yield Effective Yield Change in (as of
Slide 30: Additional Information
E C C S U P P L E M E N TA L I N F O R M AT I O N 1 Additional Information Income Cash Received Income Loan Accumulation Facility Holdings Capital Realized Reconciliation to U.S. GAAP Financial Statements Accrued During During Accrued During (as of December 31, 2021) Invested Gain/(Loss) (as of Dece
Slide 31: Portfolio Investments and Underlying Portfolio Characteristics
E C C S U P P L E M E N TA L I N F O R M AT I O N Portfolio Investments and Underlying Portfolio Characteristics As of December 31, 2021, ECC’s portfolio was invested across 108 CLO investments Summary of ECC’s Portfolio of Investments1 Cash 1.8% Other 0.9% Loan Accumulation Facilities 6.4% CLO Debt
Slide 32: Obligor and Industry Exposures
E C C S U P P L E M E N TA L I N F O R M AT I O N Obligor and Industry Exposures As of December 31, 2021, ECC has exposure to 1,829 unique underlying borrowers across a range of industries Obligor and Industry Exposure Top 10 Underlying Obligors1 % Total Top 10 Industries of Underlying Obligors1,2 %
Slide 33: Maturity Distribution of Underlying Obligors
E C C S U P P L E M E N TA L I N F O R M AT I O N Maturity Distribution of Underlying Obligors Maturity Distribution of Underlying Obligors1 31.2% 30% Prior to 2025, only 12.8% of ECC’s underlying loan 19.8% % of Fund Exposure 20% portfolio matures 18.7% 16.3% 10.1% 10% 2.4% 1.1% 0.3% 0% 2022 2023 2
Slide 34: Selected Market Data
© EAGLI CREDIT H POINT COMPANY
Slide 35: Credit Fundamentals
S E L E C T E D M A R K E T D ATA Credit Fundamentals Average Leverage Multiples of Outstanding Loans Average Interest Coverage Multiples of Outstanding Loans (Debt/EBITDA)1 (EBITDA/Interest)1 Average Leverage Multiples of Newly Issued Loans Average Interest Coverage Multiples of Newly Issued Loans
Slide 36: Credit Fundamentals
1. 3Q09 9.7% 3Q09 (3.2%) 4Q09 15.4% 4Q09 12.9% loans. 1Q10 9.4% 1Q10 5.2% Source: S&P LCD. 2Q10 15.0% 2Q10 8.0% 3Q10 24.5% 3Q10 14.5% 4Q10 20.2% 4Q10 13.7% 1Q11 19.6% 1Q11 21.0% 2Q11 17.0% 2Q11 18.0% 3Q11 14.8% 3Q11 14.0% Credit Fundamentals 4Q11 9.6% 4Q11 14.0% 1Q12 12.8% 1Q12 12.0% 2Q12 12.2% 2Q12
Slide 37: Liquidity Considerations
S E L E C T E D M A R K E T D ATA Liquidity Considerations Secondary trading is conducted through BWICs (“Bids Wanted in Competition”) and privately negotiated sales CLO debt and equity tranches typically settle electronically via DTC and trade on a T+2 basis Annual CLO Trading Volume $200 $184.
Slide 38: Company Information
COMPANY INFORMATION Eagle Point Credit Company Inc. 600 Steamboat Road, Suite 202 Greenwich, CT 06830 www.EaglePointCreditCompany.com ICR (Media and Investor Relations) IR@eaglepointcredit.com (203) 340 8510
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